August 21, 2025 • 41 mins
S&P reaffirms the U.S. credit rating, Jerome Powell takes the stage at Jackson Hole, and mortgage rates spark a refinancing boom. On today’s episode of Simply Money presented by Allworth Financial, Bob and Brian explain what it all means for your money, why cashing out a 401(k) can wreck your retirement, and answer listener questions on Roth conversions, direct indexing, and Social Security.
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Episode Transcript
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Speaker 1 (00:00):
Every day. Listen to Dave Ramsey rich. People ask how
much broke? People ask how much down and how much
a month?
Speaker 2 (00:07):
With Dave's eight seven asking how much fifty five karc
the talk station.
Speaker 3 (00:20):
Tonight, how a strong wealth plans, factors in what's going
on behind the scenes and behind the headlines. You're listening
to Simply Money, presented by all Worth Financial on Bob
Sponseller along with Brian James. There's some economic news out
there that may have missed. S and P Global just
reaffirmed the US credit rating at double A plus. That's
(00:43):
meant to be a good thing. The reason tariff revenue.
Brian the news. S and P reaffirm the US sovereign
credit rating at double A plus with a stable outlook,
citing tariff revenue as a key buffer that's now starting
to offset the fiscal strain from new tax cuts and
spending recently passed under the One Big Beautiful Bill.
Speaker 4 (01:07):
Yeah, nothing makes for awesome radio such as talking about
credit ratings of country. So I think that might be
why it's flying a little under the radar that this happened.
But anyway, so this is good news because there have
been concerns about the decisions that the United States is
making and the way it's conducting itself in the world order,
which is obviously very, very different from the way it
(01:28):
has in the past. So just the fact that the
credit rating agencies have chosen to maintain is a sign
that at least some out there don't feel like the
tariffs are going to have as scary and terrifying and
debilitating of an impact. I just did cause me the question, Okay,
so we're double A. We've been double A since twenty eleven.
(01:49):
There's been some up and downs, ups and downs, but
the United States lost its triple A from S and
P same organization in August of twenty eleven and never
really got it back. So that made me wonder who
is triple A. So that's Australia, Canada, den Mark, Germany, Liechtenstein, Luxembourg, Netherlands, Norway, Singapore, Sweden,
and Switzerland are your teacher's pets in this particular category.
So you can still find it out there. But the
numbers here behind this. So in July alone, customs income
(02:11):
was up by about twenty one billion dollars, and that's
the tariff revenue is up to twenty eight billion dollars.
That's kind of a bright spot amid otherwise a rising
deficit which is now a two hundred ninety one billion
and federal debt that we're getting up to thirty seven trillion.
Would be great to hear this administration be the first
in a long time to actually mention federal debt after
(02:32):
the campaign, we win elections, and then we never talked
about again about it again. Both sides have done this.
Speaker 1 (02:39):
All right, do you want me to share my opinion
on this or just read the news?
Speaker 4 (02:42):
Brian, pretty sure it's coming anyway, Bob unleash.
Speaker 1 (02:46):
All right, we're at double A plus, not just double A.
Speaker 3 (02:50):
And I really could care less about the credit rating
of Liechtenstein, and our listener should feel the same way.
We're dealing with the largest economy in the world, and
let's face it, regardless of what side of the political
aisle you are on, and I agree with the point
you just made, at some point we've got to address
(03:10):
this debt and deficit the government again, depending on which
side of the ile you camp on, camp out on.
The government spends too much money, especially when it doesn't
take in enough money to offset the amount of money
that it spends.
Speaker 1 (03:25):
That's no news to anyone.
Speaker 3 (03:27):
I think where things are settling in right now is
this administration is seeing tariff revenue as a way to
do two things.
Speaker 1 (03:35):
It's a revenue generator.
Speaker 3 (03:36):
Think of it as a national sales tax, because that's
really what it is. Consumers and businesses are ultimately paying
this tax.
Speaker 1 (03:45):
What this administration is hoping.
Speaker 3 (03:48):
Is that with the passage of the Big beautiful Bill,
permanent tax cuts on shoring, some manufacturing, bringing trillions of
dollars back into this economy to build plants and equipment,
hopefully hire people that will generate tax revenue in the
form of income taxes and actually grow this economy. And
I think that's what this administration is hoping to do,
(04:11):
grow the economy at a pace that will offset a
growing deficit.
Speaker 1 (04:16):
That's what they're hoping to do.
Speaker 3 (04:18):
But the point you just raised, we're about to see
a debate go on during the month of September when
the Senate comes back from recess after Labor Day to
see what happens with the budget and a potential budget shutdown.
So there's a lot going on here. Bottom line, I
would ignore this S and P credit rating stuff because
(04:39):
the bond market tells us every day what the supply
in the demand is for US credit and US debt,
and that's what moves interest rates in the short term.
Speaker 1 (04:51):
That's my schoy.
Speaker 4 (04:52):
So Bob, I want to respond to that little bit.
So I sit right to the middle, which means I
have no faith on either side to really follow through
on what it promised it was going to do during
the campaign. It never happens. And I would love the
fact if we have managed to, you know, lower costs
with DOGE and increase revenue with the tariffs, then the great.
But I want the first ounce of evidence that any
(05:12):
of that was the intention to begin with. Tower the
lower the federal debt. Like I said, we elected yet
another president who quit talking about their federal debt as
soon as he got elected. And if we've got twenty
eight billion dollars coming in, where is it actually going.
I haven't seen a single ounce of evidence that it's
going to any things that were promised. So I want
feet held to the fire. Bob, I join you. I
join you in that. All right, we can agree.
Speaker 3 (05:34):
All right, you're listening to simply money presented by all
with financial on Bob spun Seller along with Brian James
in other news news outlets from across the country are
on their way to Jackson Hole, Wyoming to hear what
FED Chair Jerome Powell has to say about interest rates,
and he's going to give a big speech on Friday. Brian,
(05:56):
what are the possible outcomes of FED chair Pal's speech
coming up on Friday?
Speaker 4 (06:01):
Well, of course these are the these are the routine
meetings they have, and what they're gonna do is tell
us what they think about interest rate. So this is
the annual this is the big one. So Jackson Hole
is an annual meeting. It's a big big to do
in this part of the world. And he's gonna basically
be taking the stage and talking about what the momentum is,
what are the impact of tariffs and the political pressure
that he's seen. Gonna be lots of questions about that
(06:23):
because we're seeing an environment between the executive branch and
the Federal Reserve that we have not seen since really
sin since the early seventies with Nixon. So but anyway,
so let's talk about what So Jackson Hole, Well, why
is it special there? What's going on there? Why don't
they do this in DC? It's a tradition and it
goes back to Paul Volkler, who was the FED chair
and he really liked fishing, and fishing is a great
(06:44):
thing to do out in Wyoming. So that's why the
Kansas City FED decided, you know what, we're going to
move this to Jackson Hole. Keep everybody happy. We know
Vulkar will show up, and he sure did so. Anyway,
that's why we always talk about Jackson Hole this one
day a year and kind of never again. But anyway,
so back to the reality of of what's going on
right now. The timing is pretty important. So after the
July FED meeting, there's about seven weeks with no scheduled
(07:07):
policy updates until this event, so we've had a good
stretch of time, and heaven knows, there has been headlines
and since then we've argued about the Federal Reserve building
in DC and whether power should be in the same
seats and all that kind of stuff. This is Pal's
first real signal and whether the Fed's going to pivot
toward interest rate cuts or keep waiting. So in other words,
this is the first time in a while that we
will hear someone from the FED talk about what the
(07:29):
FED is supposed to actually be doing as opposed to
window treatments and torn ups.
Speaker 3 (07:34):
All right, well, hey, there are only three possible outcomes
here for this speech. Number one, he can just tap
dance around, which is what he always does, saying the
FED is quote unquote data dependent. I think that's likely
to be a big part of that speech. The other
thing is he could signal a rate cut. He could
(07:54):
suggest that they're starting to factor in a twenty five
basis point cut in September, which, by the way, I
think the stock and bond market has already factored in.
We're seeing eighty five to ninety percent probabilities already factored
into the prices of stocks and bonds that we're gonna
get a quarter a quarter point rate cut in September.
(08:15):
If we don't get that quarter point rate cut, I
think the markets will responding kind and drop. And I
think a third option could be, you know, pushing back
on dropping rates Fed chair Pal, I mean saying, well,
we could be getting more inflation and labor resilience and
we're not going to cut rates because of tariffs, and
(08:37):
inflation is gonna spike. I think that would cause markets
to drop. Also, in other words, I think, and I
know we've talked about President Trump pushing FED Chair pal
into a corner, you know, bullying him on rate cuts,
and you and I agree, Brian, that's not a good
way to operate, you know, deal with the Fed chair
(09:00):
you know on Twitter or you know, other social media outlets.
But I think the markets, the markets themselves have pretty
much pushed this Federal Reserve into a corner here. And
if we don't get a twenty five basis point cut
in September, I think the markets will respond negatively.
Speaker 1 (09:17):
Your funds.
Speaker 4 (09:18):
Yeah, so it's gonna gonna be interesting. It's a little
bit of a soap oper right. If you're really a
nerd that's truly into this stuff, then this is one
of the more intriguing periods the Federal Reserve has ever had.
Because remember, Jerome Powell is not the only one on
the island. There are other Fed governors in there whose
opinions count as well, and they seem to they're starting
to develop teams just like on those reality shows. So
(09:40):
so Michelle Bowman, she's the Vice Chare for Supervision. She
is advocating for swift rate cuts, and she she's always
kind of believed that we need to be reducing interest
rates because of the weakening US labor market. She wants
to goose the system and tap the gas a little bit.
And she and Governor Christopher Waller all came together and
basically got very vocal in July at that meeting arguing
(10:04):
for the twenty five basis point cut. And there there
have been other arguments along the way pushing for it,
so it does not move in lockstep. This is, at
the end of the day, still a committee. Jerome Powell
is obviously the spokesperson for the committee. But there are
different opinions out there, and there's gonna be a lot
of kicking around what might happen. Matter of fact, I'll
bet there's there are probably wagering sites out there where
(10:24):
you can bet on the outcome of the Jackson Hole
meeting if you are so inclined. But there is a
growing chorus for for rake cuts in the FED, and
that's again that's being led by Bowman and Waller, and
they're talking about the labor fagility and a little bit
milder inflation pressures. They're basically saying that that we need
it and the and the impact of ongoing inflation is
not being seen. But there's there's another fashion that says
(10:46):
we got to be careful, and we have we have
not seen the impact full impact of these tariffs and
so forth. So it's gonna be kinds of kind of
a balancing act between those two sides. And but that's
gonna tell us what the tone is heading into the
September meeting.
Speaker 3 (10:59):
Brian, Federal Reserve Governor, what would be your preference meet
in Jackson Hole, Wyoming or Washington, d c oh.
Speaker 4 (11:08):
I'd be all Jackson Hole, Bob. I like the outside.
I like the I would like to be able to
get out of those meetings, and I would like to
roam the streets of Jackson Hole and read all the
weird historical signs about this thing happened here in eighteen
forty seven. I love that stuff.
Speaker 1 (11:21):
All right, how about you back to you then, what
would you do the same?
Speaker 3 (11:24):
And maybe we can you Maybe we can treat this
Jackson Hole meeting kind of like you know, Groundhog Day.
Depending on the number of fish, the number of rainbow
trout these fed governors catch or don't catch. Maybe that'll
be our signal on if we're gonna get a rate
cut in how big.
Speaker 4 (11:41):
I bet you know? And I have a better idea.
How about a live Simply Money brought to you by
all Worth Broadcast Tear Jackson, Hole the Jackson Little.
Speaker 1 (11:49):
Let's jump on a plane and go out there. All right?
Speaker 3 (11:51):
Coming up next, we're gonna talk about the hidden consequences
of a job change that could surprise you. You're listening to
Simply Money, presented by all Financial on fifty five KRC,
the talkstation.
Speaker 5 (12:05):
Add KRC Cincinnati, available everywhere with the iHeartRadio app now
number one for podcasting. Fifty five KRC an iHeartRadio station.
Speaker 6 (12:16):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 3 (12:36):
You're listening to Simply Money, presented by all Worth Financial
on Bob spun Seller along with Brian James. If you
can't listen to Simply Money every night, subscribing get our
daily podcasts. And if you think your friends could use
some financial advice, tell them about us as well. Just
search simply money on the iHeart app or wherever you
find your podcast. How do you pull money out of
(12:58):
your portfolio without handing too much over to Uncle Sam.
It's one of several questions you asked us, and we're
gonna tackle that one and more coming up at six
forty three. All right, Brian, mortgage rates have dropped, and
that they have dropped enough to set off a wave
of refinancing activity.
Speaker 1 (13:18):
What's going on with mortgage rates? Brian?
Speaker 4 (13:21):
Yeah, So mortgage rates are something that we've been spoiled
with over the past several decades, and I feel like
everybody feels entitled to the three and a quarter something.
I have a handful of client to where like like
I think two and I might have somebody at two
and three quarters on their mortgage. And so we had
a great run there, and I think we've all kind
of determined that that's what it's supposed to be because
it was just so goshtro On wonderful that led that
(13:43):
did play a role in leading us to an inflationary
period too, So that's why rates are higher, now, you
got it. You can't let that run wild. But so anyway,
the headline is that thirty year fixed mortgage rates have
fallen to their lowest level since March, and as we
always talk about how great that, we can talk about
something that has hit the lowest peaks in three months ago,
which isn't really all that long ago, long er that,
but anyway, refinanced. So the result of that was refinance
(14:06):
application spiked about twenty three percent and adjustable rate mortgages
saw twenty five percent increase in demand. Now, those are
the steps that you take when rates fall. That refinance,
of course, is you going back to your bank and saying, hey,
I want a better deal, or I'll go to another
bank and get a better deal. And an adjustable rate
mortgage is something you might put in place if you're
not going to stay in the home very long. Those
(14:27):
are that's something where you'll lock the rate in at
a lower lower than your normal thirty or thirty year rate,
but it will adjust in five seven years, depending on
the rate that you choose. So if you're not going
to stay somewhere very long, that can be a great
way to get to get a little better interest rate
in the short run. So overall mortgage demand rose by
about eleven percent, with refis making up nearly half of
(14:48):
all of that. So basically, to me, Bob, this is
pent up demand from people who bought houses over the
last couple of years with these higher interest rates, and
all of a sudden probably did so with the idea
that bit of a gamble. I don't love these rates,
but we'll always be able to pull down and we
if we are truly entering a rate or a rate
reduction cycle, then we will see this every few months.
(15:10):
People will be back in the in the times where
people were refinancing a couple three times a year just
because the rates were moving the right direction.
Speaker 1 (15:16):
No, and this is a good thing.
Speaker 3 (15:18):
And I think it's good news to see consumers are
paying attention and responding and refinancing their debt. That's what
we should be doing. And I think this speaks to
a topic we've been covering. You know, you and I
have been covering for the last few months, Michelle Sloan,
our real estate expert that comes on here all the time.
And I think, you know, this is why President Trump,
maybe in an inappropriate way from time to time, is
(15:40):
bullying the FED chair.
Speaker 1 (15:42):
If we can get these mortgage.
Speaker 3 (15:44):
Rates down, this is going to help out a lot
of people, you know, just the cost of their day
to day lives, not to mention the cost of the
federal debt. So to see a twenty three percent week
over week refinance application surge is great regardless of what
that m he's being used for. Maybe it's being used to,
you know, pay down credit card debt or just lower
(16:05):
monthly payments.
Speaker 1 (16:06):
It's all a good thing, I think.
Speaker 3 (16:07):
With these adjustable rate mortgages though, and I think you
called this out, but just it's worth repeating. We need
to remember two thousand and eight, and this was a
chapter we should not forget back when people were buying
homes that they could not afford with adjustable rate mortgages,
and then lo and behold, when those rates started to
go up rather than down, massive defaults happened and foreclosures,
(16:31):
and that, you know, brought on what we all know
is the housing crisis. And we don't need to repeat
that anytime soon.
Speaker 1 (16:37):
So I guess the good news this time around as well.
Speaker 3 (16:41):
You can't just go out and get a loan by
showing an IB back, you know, like you could in
two thousand and eight, just fog a mirror. You know,
there's stronger underwriting stronger bank regulation to keep you know,
some of these predatory loans from happening. You're listening to
Simple Money, presented by all Worth Financial on Bobspondseller along
with Brian James.
Speaker 1 (17:01):
All Right, we're also following some news that is not.
Speaker 3 (17:04):
Good news to hear for us in the financial planning world.
Speaker 4 (17:07):
Brian, so our find our friends at Vanguard, one of
the largest four to oh one K planned administration firms
financial institutions in the world. Uh is saying that about
a third of their of the participants who have Vanguard
administered four oh one k's, cashed out their entire balance
when they leave a job, rather than rolling it or
leaving it alone. So what this means is somebody says, well,
(17:29):
you know, I'm gonna leave ABC machines and go over
to eight to act me one two three, and I
got my old retirement plan there. Well, you know what
I don't. I don't want to keep it in retirement.
That's my money. I want to get it out. I'm
gonna go ahead. Yeah, the irs is gonna take a chunk,
but whatever, I'm gonna pull it out anyhow. So this
is a terrible, terrible cycle to be to get into
because and I say this all the time, especially to
(17:50):
young people, my client's kids, when when we get my
own kids, my kids, friends, and so forth, those first
dollars that you are putting into your four oh one K,
your IRA, those are the most valuable dollars you're we're
gonna have because they're gonna grow for forty or fifty
or even sixty years. Leave them alone. So this particularly
happens to hourly workers. Four and ten of them cash
out compared with just about two and ten of salaried workers,
(18:12):
even when the incomes are similar. So this does seem
to be the default position for a lot of people. Unfortunately.
Speaker 3 (18:18):
Yeah, Brian, this this, this takes me back to the
days when I used to be, you know, the actual
advisor to several fairly large four one K plans, and
I'd stand in front of the employees every year and
give kind of the annual update on asset allocation, tax law,
matching funds, all that, and invariably hands would go up,
and almost always they came from those hourly workers. And
(18:41):
you know, four and ten with that Vanguard study, four
and ten of hourly workers cash out their plans versus
just two intent of salary workers. But again those hands
would go up and Brian I would constantly fight against
this thought that's out there largely among hourly workers that
(19:02):
the company can take their money. You know that these
four to one K assets are an asset of the company,
and the company is somehow going to take their money
or rip them off if they leave.
Speaker 1 (19:13):
And I tried and tried and tried to remind them that.
Speaker 3 (19:16):
There's federal laws against that these assets are separate from
the balance sheet of the company. But sometimes people just
don't listen, or they're overextended in other parts of their
lives with credit card debt or car loans or what
have you, and it's just they see this as a
way to get my hands on a check, irrespective of
the penalties and taxes, and who knows what happens after that.
Speaker 4 (19:39):
Unfortunately, it's a great way to stay poor thinking like that,
and understand at least a little bit about the rules,
because what you're robbing yourself of is decades of compounded growth. Right,
So if you have just five thousand dollars in a
four to one K and you're young, then that money
could grow to over seventy thousand dollars by the time
you retire, assuming you're you know, on the younger side
of that thing. So why dis so many people walk away?
(20:00):
Well they just feel like I think it's like you said, Bob,
it's more about the well, you know, I need it
in my hand now so I can pay bills, and
I'm going to assume somehow that my evil employer is
gonna take it. That can't happen. Learn, learn what the
reality is, and learn what you're sacrificing. Extremely important.
Speaker 1 (20:14):
Here's the all Worth advice.
Speaker 3 (20:16):
Preserving and rolling over your savings rather than cashing them
out protects the financial foundation you're trying to build for
a retirement. You're listening to Simply Money presented by all
Worth Financial on fifty five KRC the talk station.
Speaker 4 (20:32):
They're learning about history fourteen ninety two and learning about
the news.
Speaker 1 (20:37):
It makes a little great again.
Speaker 2 (20:39):
Oh boy, locker, excuse you'll learn what's going on back
to school fifty five KRS the talk station.
Speaker 5 (20:48):
This is fifty five KRC and iHeartRadio station.
Speaker 3 (20:56):
You're listening to Simply Money presented by all Worth Financial
on Bob's Bond Seller along with Brian James, and we're
joined today by our career expert Julie Bauki Julie on
the Job, Julie, thank you for making time for us
this morning. And I know you've got an important topic
to cover with us today, and that's the topic of
tying our identity to our work, especially.
Speaker 1 (21:18):
When we think about pulling back or retiring.
Speaker 7 (21:22):
Yeah, you know, we give so much of our time
and energy and effort and resources to work that when
all of a sudden we decide one day it's time
to walk away, or somebody make that decision for us.
The more closely you have identified with your work in
your life, the harder that exit's going to be. Contrary
(21:43):
to this vision that I'm just going to step away
and I will be stepping into this amazing future. Unless
you build your what's next, the transition from being a
VP of something something to no longer having that title
is incredibly painful, and I think we really really underestimate
(22:05):
how hard that is for people.
Speaker 4 (22:07):
Sally, would you say, is it fair to say that
people put far more energy into building there? What was
meaning I'm going to think about my career and I
really want to drive things. Then they do in that
What's next thing and how do you get people off
of the notion that that's something that will take care
of itself.
Speaker 7 (22:23):
You know, when if you look back, so high performing,
high accomplishment people, people who accomplished a lot in their career,
they have most likely put an emphasis on that. When
you look at sort of the dinner plate of life,
let's call it. If work is your main course and
you've really crowded out any side dishes it when that
(22:44):
main course goes away, yes, you have accomplished a lot.
And so a lot of times people who are they've
accomplished a lot. They have big titles, big jobs, big
bank accounts. It has been at the expense of other
things on that plate.
Speaker 8 (22:59):
And so.
Speaker 7 (23:01):
Instead of expecting everything the shift to write itself after
you retire, you have to start thinking about now before
you retire. I mean maybe even when you're in your fifties,
where are you're putting your emphasis? Are you putting it
all on work? And then what are you short? You know,
what are you short changing? Family, friends, health, hobbies, community,
(23:23):
the kind of stuff that you might say matters, but
your action show otherwise. And so sometimes we get to
be high performing and wildly successful because that is where
we put our emphasis, so the loss when we walk
away from that. And this is why a lot of
people who are high performing, they have a really hard
time walking away because they won't be senator so and
(23:43):
so they won't be you know, vice president of this
or vice president of that, and because that's been how
they've identified for so long. It's really really a big fall,
especially when you go back home and your partner's not
that happy to see you, or your health has really
suffered and your doctor's on you. And so the only
way to get around this is to start thinking about
it well before you retire. How am I prioritizing my
(24:06):
time and what do I need to start building now
so that when I retire into five, seven years, whatever
it is, I have some other My non work bucket
is already starting to fill up. I can start to
imagine myself without that title. And it's still hard. It's
(24:27):
still hard to walk away from something that has been
that's so important to you for so long. But if
it's believed me, it is much easier to walk away
once you started filling that second bucket. Then to imagine
life without your title, your office, you know those sort
of things. And we all know that person who are
retired but still keeps coming back into the office and
(24:47):
walking around and talking to people. It's because they haven't
developed that next stage of life yet.
Speaker 3 (24:53):
Well, Julia, someone who's counseled, no doubt hundreds of people
through this transition. Walk us through some of the healthy
ways to kind of soft land into retirement or semi
retirement instead of just going cold turkey. What do you
counsel people to do in terms of practical steps to
make this transition ahead of time.
Speaker 7 (25:13):
It's one of my favorite things. So we all have
a calendar of some sort, and I've.
Speaker 4 (25:18):
Done this exercise myself.
Speaker 7 (25:19):
Walk ahead to some place on your calendar where you
have nothing on it yet, maybe it might even be
two years away, and look at that week, and say
to yourself, all right, I'm imagining this is my calendar
when I'm retired. It is empty. I now have full
control of my week, every minute of it to a
(25:40):
big extent. How am I going to fill it in?
How am I going to fill it in? How many
times a week do I want to play golf? Or
how many times a week is there a community thing
I want to involve it?
Speaker 2 (25:49):
In?
Speaker 7 (25:49):
Other words, start to imagine yourself in that space and
look at an empty calendar without work pulling on you,
and just imagine and how are you going to fill
that time? The delight of waking up, you know, at
seven instead of six and going online and reading the news,
and that wears off pretty quickly, even though it might
(26:09):
sound like nirvana right now. So you have to you
have to put yourself into the future and say, how
will when I have a weekly stretching in front of me,
how will I spend my time? Is it going to
be family, friends, community? Am I going to start getting
more serious without my health? And then fill in the
calendar is if you had full control of it? What
have you ignored in the last twenty thirty years of
(26:32):
working that you're really interested in? Are you going to
ramp up in a hobby. Are you going to become
better at something or are you going to learn something?
Are you going to get involved in something? What are
you going to do to make that next phase of
life as powerful and meaningful as your previous ones? For
because we've offered the stories about, you know, the last
(26:53):
several decades, people who retire and then die soon after
it's because they went from having great purpose to completely
loss of purpose. And that sounds really really seductive when
you're in the middle of a crappy day, but it's not.
It's not so great when you're in the middle of it.
Speaker 4 (27:08):
Julie, I want to hear some war stories. So so
Bob and I as financial advisors, we of course have
our favorite, our favorite times where we help somebody with
a financial plan. Maybe they were scared to death and
we helped them put the puzzle pieces together and they
walked out, you know, pretty happy. Can you give us
an example, of course, without naming any names, of somebody
that was just terrified until you put a plan together
and how does that? That does that work? What was
what's your most favorite story?
Speaker 7 (27:30):
Yeah, so it was a woman who had a great
job in marketing. I'm just a great job and she.
Speaker 5 (27:38):
Liked it.
Speaker 7 (27:39):
You know, she's kind of five out of ten. But
she had started a side business that that she was
really passionate about because she was so afraid to step
away from what she saw as a dependable, logical, common
sense thing, because she thought people would say, why are
you doing that? You're sixty two years old, you know,
why are you you know, why would you walk away.
(28:01):
You've got a great job, they love you. Why would
you walk away and try something new at fifty two
years old. They looked at her life, she was crazy,
and we were able to help her figure out what
was most important to her. It takes almost a polaroid
of snapshot. What's the most important to you now? And
why are you listening to anybody else except what you want?
And what's most important to you? And once she was
(28:23):
able to kind of shut out the noise of other
people giving her the shoulds and are you crazy, she
was then able to get really clear about what was
most important to her for the next five to seven
years or as long as she wanted to work, and
it was clearly in building this side business. It already
had signs of being really successful. She took the leap
(28:43):
because she'd said, Okay, I've got it's now or never.
And of course, you know we're all looking at her
like you're not. You've got to do this. And just
checked in with her recently, and she is incredibly happy.
She looks ten years younger, and she's just as successful
in the side hustle as she was as she as
in her original job. And that's the same with people
who have a passion for animals or community. Once they're
(29:06):
able to put more time and resources into that, you
can see them absolutely come alive. We've had clients move
from for profit from a high level position and a
for profit to a high level position a nonprofit where
they are instead of focusing on how many widgets they sell,
they're focusing on how many lives they impact, and to them,
(29:27):
that's meaningful. So you have to figure out what your
priorities and values are for the next phase of your life.
Once you can ank that, making that jump is a
lot easier.
Speaker 3 (29:39):
All right, We got to leave it there for today, Julie,
but thank you as always for all the great advice
you provide us and our listeners. You're listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station.
Speaker 2 (29:52):
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Have you been Torc?
Speaker 3 (30:31):
You're listening to Simple Money, presented by all Worth Financial
umbop sponsller along with Brian James. Do you have a
financial question you'd like for us to answer? There is
a red button you can click while you're listening to
the show right on the iHeart app. Simply record your
question and it will come straight to us. All right,
speaking of questions coming to us, Brian, we're gonna kick
(30:52):
things off with Karen and Mason, who says, I've.
Speaker 1 (30:56):
Already done Roth conversions.
Speaker 3 (30:58):
What else should I be thinking about to pull money
out of retirement accounts tax efficiently over the next decade.
Speaker 4 (31:05):
Yeah, that's great, Karen, You're you're kind of ahead of
the game there. So when Roth conversion, of course, means
you're taking your pre tax four oh one K dollars,
which is mostly what we have in our four oh
one ks and four or three b's because that's all
that existed thirty years ago. It's all you could do,
and you've decided to pay it, pay taxes proactively. I'm
guessing you probably wrote some decent sized checks to the irs,
and now that money from that day forward will grow
(31:25):
tax free. So very much a sacrifice up front in
exchange for a significant benefit on the back end. But
make no doubt about that sacrifice, as I'm sure Karen
is well aware. So she's asking, of course, what else
can she do? Well, that's really the big thing. What
you're doing, I would say, pay attention to the impact
it's having, so you know, you might even look at
doing backdoor ROTH contributions if you're still putting money out
(31:48):
in I'm not sure if you're retired or not, but
if you're still putting money away then and you can't
you think you can't do ROTH contributions, you may actually
be able to. But beyond that, when you hit another
thing to bear in mind, as you are charitably, when
you hit a point of when you have to do
your required minimum distributions, which could be age seventy three
to seventy five depending on when you were born, then
you might want to look at something called a qualified
(32:10):
charitable distribution or a QCD, which would mean you're sending
your RMD that you have no choice about directly to
a charity and therefore you don't pay any taxes moving
parts to that. But those are things to think about.
So let's flip over here to Andrew and Anderson, and
he asks, when drawing down my retirement accounts, should I
prioritize my taxable accounts first to keep that Wroth money
compounding or is that too overly simplified Bob.
Speaker 3 (32:33):
Well, Andrew, I'd say this, you know, in a perfect world, yes,
you want that Wroth money compounding as long as it
can because obviously it's compounding tax free, and you could
pull the money out tax free.
Speaker 1 (32:44):
So you're thinking about this the right way.
Speaker 3 (32:47):
The details come down to what what are we looking
at here with.
Speaker 1 (32:51):
These taxable accounts? How much tax exposure do you have?
Speaker 3 (32:55):
And so the key thing to focus on is your
marginal tax bracket when you look at where where all
your income is coming from from all sources meaning social Security.
Maybe if you have a pension taxable accounts, IRA withdraws
raw IRA accounts require minimum distributions. There's a lot to
look at here. So my answer would be sit down
(33:17):
and help with maybe a good advisor, a fiduciary advisor,
craft a tax efficient income strategy because you might end
up wanting to pull some money from different sources, and
along the way, if you've got some big embedded gains
in those taxable accounts, there's ways to work out of
that on a tax efficient basis and make everything work,
(33:39):
you know, much better and much more efficient efficiently over
the long haul. Great question, Andrew, All right, let's go
to Ron in Fort Thomas. Brian, this one's for you.
Is direct indexing actually worth it for someone with a
five million dollar portfolio? Or is that all just marketing hype? Brian,
Ron is tired of your mark marketing hype about direct indexing.
Speaker 1 (34:02):
Will you educate him here?
Speaker 3 (34:04):
It's not just hype that this stuff might actually work
in some cases.
Speaker 4 (34:08):
Yeah, so let's sor sorry, we've been a little overbearing
on that. Apparently they're Ron, but these these are important tools, right,
So the right tool for the right job. And frankly,
assuming this five million dollars maybe and maybe this is
the rough. If this five million dollars is inside of
an IRA or four to one k, which does happen,
then no, this doesn't help you at all. Direct indexing
is it is kind of irrelevant to that. It has
(34:30):
no impact on the tax outcome in that situation. But
if you've got five million taxable meaning not IRA, not
four oh one k, just outside in a in a
regular account that spits out of ten ninety nine, there
is even if that's your only asset, there's a good
chance that you have a six digit income anyhow, just
off the dividend and interest activity alone. So direct indexing
allows you to build a portfolio with the similar to
(34:54):
a pile of mutual funds that would have the built
in diversification that we want, but instead of the individual
mutual funds, you're looking at literally individual securities that make
up that whole portfolio. So yes, it would be a
whole lot of positions in your portfolio. The benefit, though,
is each and every one of those, you know, let's
let's say you're mimicking the S and P five hundred.
Each and every one of those five hundred stocks has
(35:14):
its own tax situation, meaning as one of them has
a bad quarter, has bad earnings, or it gets you know,
some lawsuits flapped against them or something like that, which
is going to happen to everybody every single year, it's
always possible then that stock is going to take a hit.
You can pinpoint that stock in your portfolio, sell it,
take the loss, and then stay out of it to
avoid a wash sale. Stay out for thirty days, and
(35:35):
then buy back in and you get to deduct that loss.
You know, over five hundred companies over a year, stuff
is going to happen. You know, market goes up and down,
companies have good quarters and bad quarters. That creates a
lot of tax loss. Harvesting activity that can offset a
lot of that dividend income and interest income that's going
to happen anyway. So you, sir, are the definition of
somebody who should be considering the direct indexing if that
(35:57):
five million is exposed to taxes.
Speaker 1 (35:59):
All right?
Speaker 4 (36:00):
One more from Martin and Lebanon. So should I delay
social Security even if I don't need the income just
to maximize survivor benefits for my spouse?
Speaker 3 (36:08):
Well, Martin, this social security topic, as you might imagine,
is a loaded one. There's a lot of moving parts here,
and there's different factors that go into decisions on how
to do your claiming strategy.
Speaker 1 (36:19):
The easiest thing is to run that spreadsheet saying.
Speaker 3 (36:22):
Hey, if I delay, I delay, I delay, you get
the eight percent you know bump every year you don't
take it, and it all depends.
Speaker 1 (36:30):
On how long you expect you're going to live.
Speaker 3 (36:32):
You know, there's a break even point usually in the
load of mid eighties if you just maximize. However, different
people want to make different decisions for different reasons. Some
people think the Social Security you know, benefits are going to.
Speaker 1 (36:44):
Get cut twenty four percent.
Speaker 7 (36:46):
Uh.
Speaker 3 (36:46):
You might have things going on with your investment portfolio
or other sources of income that dictate it might make
sense to take social Security earlier. So you know, it's
important to sit down again, like we talk about all
the time craft and income strategy, factor in all the
possible sources, factor in the tax ramifications of where you
take your income and go from there. You're listening to
(37:09):
Simply Money presented by all Worth Financial on fifty.
Speaker 4 (37:11):
Five KRC the talk station Mark Levin.
Speaker 8 (37:16):
Let me tell you the Internet is breeding evil, breeding evil.
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And TikTok is the main culprit.
Speaker 8 (37:22):
And I don't know what's happening with TikTok, but that
damn thing needs to be sold now and it needs
to be cleaned up. And I don't want to hear
about free speech and everything else. It's a private company.
The company needs to clean it up because this is
crazy between the communist Chinese and all the crap that
people put on this stuff.
Speaker 2 (37:38):
Mark Levin tonight at ten oh six on fifty five
krs the talk station.
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It's I am so worried that next month I have
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my car.
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Talk about it here fifty five krs the talk station.
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You're listening to Simply Money, presented by all Worth Financial
Bob spond Seller along with Brian James. And it's time
for Brian's bottom line. Brian's going to talk about how
to care for loved ones, folks that we really love
dearly and need to care for when we're entering our
own retirement phase of life.
Speaker 4 (38:16):
Yeah, and so I reason it's coming up, Bob. And
I'm sure we all share our war stories around the
water cooler. I'm sure you've got clients in similar situations.
But a lot of people know about the you know,
situations where maybe the Sandwich generation, where I have to
care about my own parents who maybe are starting to
need more and more help as well as helping my
kids get going.
Speaker 8 (38:33):
Uh.
Speaker 4 (38:33):
And so that's a fairly common thing. But there are
other situations out there where you know, we could be
a sibling. So I've got I've got a case where
one sibling has needed extrac care for for decades now,
and that has been provided by a sibling who's just
in a kind of a stronger position to provide it.
But now everybody's getting to that stage of needing to
retire and start starting to think about their own needs.
(38:54):
So what do we do in cases like this? So
just some of the things that to be paying attention to.
So I've see, make sure you know what your long
term incomanis are to begin with. Right, every financial decision
starts with where am I now? And now I can
understand so that I can clearly understand what is the
impact of this outside very specific problem that I have
to deal with in my own situation. If that loved
one does receive government benefits like Social Security, Medicaid, you're
(39:16):
going to want to avoid giving them assets directly that's
not going to That can cause problems, It can cause
those those benefits to be reduced. Special Needs Trust can
provide those supplemental funds without disqualifying for benefits. There are
things called able accounts ADL e. If they qualify, that
can be tax advantage. Savings of it could be up
to eighteen thousand dollars a year and twenty twenty five
without screwing up those benefits as well. You'll also want
(39:38):
to you want to have to look at how does
medicare and Medicaid coordinate with these things, because there are
a lot of moving parts there. Sometimes Medicaid can cover
some long term care services that Medicare won't. Long term
care planning what happens if you become this is really
the rub. This is a situation I'm seeing is is
my clients who are in a good position are realizing
that they themselves at some point are going to need
(39:59):
help and they certainly can't be a reliable and safe
resolution for their for their sibling who needs the extra assistance.
So what they're looking into is how can we arrange
using his assets? How can how can we arrange a
better care situation for him? So they're looking at different
nursing homes and again it's all started with what's the
budget for this, what's the income and what can the
assets that he has support? But anyway, so lots to
(40:22):
think about there. Make sure you're being clear and upfront
with everybody you know, especially that person to whom you're
providing care, because they may not understand what the situation
actually is. So this is a conversation to start sooner
rather than later.
Speaker 1 (40:34):
Good stuff, Brian.
Speaker 3 (40:35):
And the only only other thing I'll add is there
are attorneys out there that specialize in this type of planning,
and I know you and I have both referred folks
to good attorneys like that who are really good at
helping speck out these situations to maximize benefits for the family.
Speaker 1 (40:49):
Thanks for listening.
Speaker 3 (40:50):
You've been listening to Simply Money, presented by all Worth
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Speaker 3 (00:20):
Tonight, how a strong wealth plans, factors in what's going
on behind the scenes and behind the headlines. You're listening
to Simply Money, presented by all Worth Financial on Bob
Sponseller along with Brian James. There's some economic news out
there that may have missed. S and P Global just
reaffirmed the US credit rating at double A plus. That's
(00:43):
meant to be a good thing. The reason tariff revenue.
Brian the news. S and P reaffirm the US sovereign
credit rating at double A plus with a stable outlook,
citing tariff revenue as a key buffer that's now starting
to offset the fiscal strain from new tax cuts and
spending recently passed under the One Big Beautiful Bill.
Speaker 4 (01:07):
Yeah, nothing makes for awesome radio such as talking about
credit ratings of country. So I think that might be
why it's flying a little under the radar that this happened.
But anyway, so this is good news because there have
been concerns about the decisions that the United States is
making and the way it's conducting itself in the world order,
which is obviously very, very different from the way it
(01:28):
has in the past. So just the fact that the
credit rating agencies have chosen to maintain is a sign
that at least some out there don't feel like the
tariffs are going to have as scary and terrifying and
debilitating of an impact. I just did cause me the question, Okay,
so we're double A. We've been double A since twenty eleven.
(01:49):
There's been some up and downs, ups and downs, but
the United States lost its triple A from S and
P same organization in August of twenty eleven and never
really got it back. So that made me wonder who
is triple A. So that's Australia, Canada, den Mark, Germany, Liechtenstein, Luxembourg, Netherlands, Norway, Singapore, Sweden,
and Switzerland are your teacher's pets in this particular category.
So you can still find it out there. But the
numbers here behind this. So in July alone, customs income
(02:11):
was up by about twenty one billion dollars, and that's
the tariff revenue is up to twenty eight billion dollars.
That's kind of a bright spot amid otherwise a rising
deficit which is now a two hundred ninety one billion
and federal debt that we're getting up to thirty seven trillion.
Would be great to hear this administration be the first
in a long time to actually mention federal debt after
(02:32):
the campaign, we win elections, and then we never talked
about again about it again. Both sides have done this.
Speaker 1 (02:39):
All right, do you want me to share my opinion
on this or just read the news?
Speaker 4 (02:42):
Brian, pretty sure it's coming anyway, Bob unleash.
Speaker 1 (02:46):
All right, we're at double A plus, not just double A.
Speaker 3 (02:50):
And I really could care less about the credit rating
of Liechtenstein, and our listener should feel the same way.
We're dealing with the largest economy in the world, and
let's face it, regardless of what side of the political
aisle you are on, and I agree with the point
you just made, at some point we've got to address
(03:10):
this debt and deficit the government again, depending on which
side of the ile you camp on, camp out on.
The government spends too much money, especially when it doesn't
take in enough money to offset the amount of money
that it spends.
Speaker 1 (03:25):
That's no news to anyone.
Speaker 3 (03:27):
I think where things are settling in right now is
this administration is seeing tariff revenue as a way to
do two things.
Speaker 1 (03:35):
It's a revenue generator.
Speaker 3 (03:36):
Think of it as a national sales tax, because that's
really what it is. Consumers and businesses are ultimately paying
this tax.
Speaker 1 (03:45):
What this administration is hoping.
Speaker 3 (03:48):
Is that with the passage of the Big beautiful Bill,
permanent tax cuts on shoring, some manufacturing, bringing trillions of
dollars back into this economy to build plants and equipment,
hopefully hire people that will generate tax revenue in the
form of income taxes and actually grow this economy. And
I think that's what this administration is hoping to do,
(04:11):
grow the economy at a pace that will offset a
growing deficit.
Speaker 1 (04:16):
That's what they're hoping to do.
Speaker 3 (04:18):
But the point you just raised, we're about to see
a debate go on during the month of September when
the Senate comes back from recess after Labor Day to
see what happens with the budget and a potential budget shutdown.
So there's a lot going on here. Bottom line, I
would ignore this S and P credit rating stuff because
(04:39):
the bond market tells us every day what the supply
in the demand is for US credit and US debt,
and that's what moves interest rates in the short term.
Speaker 1 (04:51):
That's my schoy.
Speaker 4 (04:52):
So Bob, I want to respond to that little bit.
So I sit right to the middle, which means I
have no faith on either side to really follow through
on what it promised it was going to do during
the campaign. It never happens. And I would love the
fact if we have managed to, you know, lower costs
with DOGE and increase revenue with the tariffs, then the great.
But I want the first ounce of evidence that any
(05:12):
of that was the intention to begin with. Tower the
lower the federal debt. Like I said, we elected yet
another president who quit talking about their federal debt as
soon as he got elected. And if we've got twenty
eight billion dollars coming in, where is it actually going.
I haven't seen a single ounce of evidence that it's
going to any things that were promised. So I want
feet held to the fire. Bob, I join you. I
join you in that. All right, we can agree.
Speaker 3 (05:34):
All right, you're listening to simply money presented by all
with financial on Bob spun Seller along with Brian James
in other news news outlets from across the country are
on their way to Jackson Hole, Wyoming to hear what
FED Chair Jerome Powell has to say about interest rates,
and he's going to give a big speech on Friday. Brian,
(05:56):
what are the possible outcomes of FED chair Pal's speech
coming up on Friday?
Speaker 4 (06:01):
Well, of course these are the these are the routine
meetings they have, and what they're gonna do is tell
us what they think about interest rate. So this is
the annual this is the big one. So Jackson Hole
is an annual meeting. It's a big big to do
in this part of the world. And he's gonna basically
be taking the stage and talking about what the momentum is,
what are the impact of tariffs and the political pressure
that he's seen. Gonna be lots of questions about that
(06:23):
because we're seeing an environment between the executive branch and
the Federal Reserve that we have not seen since really
sin since the early seventies with Nixon. So but anyway,
so let's talk about what So Jackson Hole, Well, why
is it special there? What's going on there? Why don't
they do this in DC? It's a tradition and it
goes back to Paul Volkler, who was the FED chair
and he really liked fishing, and fishing is a great
(06:44):
thing to do out in Wyoming. So that's why the
Kansas City FED decided, you know what, we're going to
move this to Jackson Hole. Keep everybody happy. We know
Vulkar will show up, and he sure did so. Anyway,
that's why we always talk about Jackson Hole this one
day a year and kind of never again. But anyway,
so back to the reality of of what's going on
right now. The timing is pretty important. So after the
July FED meeting, there's about seven weeks with no scheduled
(07:07):
policy updates until this event, so we've had a good
stretch of time, and heaven knows, there has been headlines
and since then we've argued about the Federal Reserve building
in DC and whether power should be in the same
seats and all that kind of stuff. This is Pal's
first real signal and whether the Fed's going to pivot
toward interest rate cuts or keep waiting. So in other words,
this is the first time in a while that we
will hear someone from the FED talk about what the
(07:29):
FED is supposed to actually be doing as opposed to
window treatments and torn ups.
Speaker 3 (07:34):
All right, well, hey, there are only three possible outcomes
here for this speech. Number one, he can just tap
dance around, which is what he always does, saying the
FED is quote unquote data dependent. I think that's likely
to be a big part of that speech. The other
thing is he could signal a rate cut. He could
(07:54):
suggest that they're starting to factor in a twenty five
basis point cut in September, which, by the way, I
think the stock and bond market has already factored in.
We're seeing eighty five to ninety percent probabilities already factored
into the prices of stocks and bonds that we're gonna
get a quarter a quarter point rate cut in September.
(08:15):
If we don't get that quarter point rate cut, I
think the markets will responding kind and drop. And I
think a third option could be, you know, pushing back
on dropping rates Fed chair Pal, I mean saying, well,
we could be getting more inflation and labor resilience and
we're not going to cut rates because of tariffs, and
(08:37):
inflation is gonna spike. I think that would cause markets
to drop. Also, in other words, I think, and I
know we've talked about President Trump pushing FED Chair pal
into a corner, you know, bullying him on rate cuts,
and you and I agree, Brian, that's not a good
way to operate, you know, deal with the Fed chair
(09:00):
you know on Twitter or you know, other social media outlets.
But I think the markets, the markets themselves have pretty
much pushed this Federal Reserve into a corner here. And
if we don't get a twenty five basis point cut
in September, I think the markets will respond negatively.
Speaker 1 (09:17):
Your funds.
Speaker 4 (09:18):
Yeah, so it's gonna gonna be interesting. It's a little
bit of a soap oper right. If you're really a
nerd that's truly into this stuff, then this is one
of the more intriguing periods the Federal Reserve has ever had.
Because remember, Jerome Powell is not the only one on
the island. There are other Fed governors in there whose
opinions count as well, and they seem to they're starting
to develop teams just like on those reality shows. So
(09:40):
so Michelle Bowman, she's the Vice Chare for Supervision. She
is advocating for swift rate cuts, and she she's always
kind of believed that we need to be reducing interest
rates because of the weakening US labor market. She wants
to goose the system and tap the gas a little bit.
And she and Governor Christopher Waller all came together and
basically got very vocal in July at that meeting arguing
(10:04):
for the twenty five basis point cut. And there there
have been other arguments along the way pushing for it,
so it does not move in lockstep. This is, at
the end of the day, still a committee. Jerome Powell
is obviously the spokesperson for the committee. But there are
different opinions out there, and there's gonna be a lot
of kicking around what might happen. Matter of fact, I'll
bet there's there are probably wagering sites out there where
(10:24):
you can bet on the outcome of the Jackson Hole
meeting if you are so inclined. But there is a
growing chorus for for rake cuts in the FED, and
that's again that's being led by Bowman and Waller, and
they're talking about the labor fagility and a little bit
milder inflation pressures. They're basically saying that that we need
it and the and the impact of ongoing inflation is
not being seen. But there's there's another fashion that says
(10:46):
we got to be careful, and we have we have
not seen the impact full impact of these tariffs and
so forth. So it's gonna be kinds of kind of
a balancing act between those two sides. And but that's
gonna tell us what the tone is heading into the
September meeting.
Speaker 3 (10:59):
Brian, Federal Reserve Governor, what would be your preference meet
in Jackson Hole, Wyoming or Washington, d c oh.
Speaker 4 (11:08):
I'd be all Jackson Hole, Bob. I like the outside.
I like the I would like to be able to
get out of those meetings, and I would like to
roam the streets of Jackson Hole and read all the
weird historical signs about this thing happened here in eighteen
forty seven. I love that stuff.
Speaker 1 (11:21):
All right, how about you back to you then, what
would you do the same?
Speaker 3 (11:24):
And maybe we can you Maybe we can treat this
Jackson Hole meeting kind of like you know, Groundhog Day.
Depending on the number of fish, the number of rainbow
trout these fed governors catch or don't catch. Maybe that'll
be our signal on if we're gonna get a rate
cut in how big.
Speaker 4 (11:41):
I bet you know? And I have a better idea.
How about a live Simply Money brought to you by
all Worth Broadcast Tear Jackson, Hole the Jackson Little.
Speaker 1 (11:49):
Let's jump on a plane and go out there. All right?
Speaker 3 (11:51):
Coming up next, we're gonna talk about the hidden consequences
of a job change that could surprise you. You're listening to
Simply Money, presented by all Financial on fifty five KRC,
the talkstation.
Speaker 5 (12:05):
Add KRC Cincinnati, available everywhere with the iHeartRadio app now
number one for podcasting. Fifty five KRC an iHeartRadio station.
Speaker 6 (12:16):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 3 (12:36):
You're listening to Simply Money, presented by all Worth Financial
on Bob spun Seller along with Brian James. If you
can't listen to Simply Money every night, subscribing get our
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search simply money on the iHeart app or wherever you
find your podcast. How do you pull money out of
(12:58):
your portfolio without handing too much over to Uncle Sam.
It's one of several questions you asked us, and we're
gonna tackle that one and more coming up at six
forty three. All right, Brian, mortgage rates have dropped, and
that they have dropped enough to set off a wave
of refinancing activity.
Speaker 1 (13:18):
What's going on with mortgage rates? Brian?
Speaker 4 (13:21):
Yeah, So mortgage rates are something that we've been spoiled
with over the past several decades, and I feel like
everybody feels entitled to the three and a quarter something.
I have a handful of client to where like like
I think two and I might have somebody at two
and three quarters on their mortgage. And so we had
a great run there, and I think we've all kind
of determined that that's what it's supposed to be because
it was just so goshtro On wonderful that led that
(13:43):
did play a role in leading us to an inflationary
period too, So that's why rates are higher, now, you
got it. You can't let that run wild. But so anyway,
the headline is that thirty year fixed mortgage rates have
fallen to their lowest level since March, and as we
always talk about how great that, we can talk about
something that has hit the lowest peaks in three months ago,
which isn't really all that long ago, long er that,
but anyway, refinanced. So the result of that was refinance
(14:06):
application spiked about twenty three percent and adjustable rate mortgages
saw twenty five percent increase in demand. Now, those are
the steps that you take when rates fall. That refinance,
of course, is you going back to your bank and saying, hey,
I want a better deal, or I'll go to another
bank and get a better deal. And an adjustable rate
mortgage is something you might put in place if you're
not going to stay in the home very long. Those
(14:27):
are that's something where you'll lock the rate in at
a lower lower than your normal thirty or thirty year rate,
but it will adjust in five seven years, depending on
the rate that you choose. So if you're not going
to stay somewhere very long, that can be a great
way to get to get a little better interest rate
in the short run. So overall mortgage demand rose by
about eleven percent, with refis making up nearly half of
(14:48):
all of that. So basically, to me, Bob, this is
pent up demand from people who bought houses over the
last couple of years with these higher interest rates, and
all of a sudden probably did so with the idea
that bit of a gamble. I don't love these rates,
but we'll always be able to pull down and we
if we are truly entering a rate or a rate
reduction cycle, then we will see this every few months.
(15:10):
People will be back in the in the times where
people were refinancing a couple three times a year just
because the rates were moving the right direction.
Speaker 1 (15:16):
No, and this is a good thing.
Speaker 3 (15:18):
And I think it's good news to see consumers are
paying attention and responding and refinancing their debt. That's what
we should be doing. And I think this speaks to
a topic we've been covering. You know, you and I
have been covering for the last few months, Michelle Sloan,
our real estate expert that comes on here all the time.
And I think, you know, this is why President Trump,
maybe in an inappropriate way from time to time, is
(15:40):
bullying the FED chair.
Speaker 1 (15:42):
If we can get these mortgage.
Speaker 3 (15:44):
Rates down, this is going to help out a lot
of people, you know, just the cost of their day
to day lives, not to mention the cost of the
federal debt. So to see a twenty three percent week
over week refinance application surge is great regardless of what
that m he's being used for. Maybe it's being used to,
you know, pay down credit card debt or just lower
(16:05):
monthly payments.
Speaker 1 (16:06):
It's all a good thing, I think.
Speaker 3 (16:07):
With these adjustable rate mortgages though, and I think you
called this out, but just it's worth repeating. We need
to remember two thousand and eight, and this was a
chapter we should not forget back when people were buying
homes that they could not afford with adjustable rate mortgages,
and then lo and behold, when those rates started to
go up rather than down, massive defaults happened and foreclosures,
(16:31):
and that, you know, brought on what we all know
is the housing crisis. And we don't need to repeat
that anytime soon.
Speaker 1 (16:37):
So I guess the good news this time around as well.
Speaker 3 (16:41):
You can't just go out and get a loan by
showing an IB back, you know, like you could in
two thousand and eight, just fog a mirror. You know,
there's stronger underwriting stronger bank regulation to keep you know,
some of these predatory loans from happening. You're listening to
Simple Money, presented by all Worth Financial on Bobspondseller along
with Brian James.
Speaker 1 (17:01):
All Right, we're also following some news that is not.
Speaker 3 (17:04):
Good news to hear for us in the financial planning world.
Speaker 4 (17:07):
Brian, so our find our friends at Vanguard, one of
the largest four to oh one K planned administration firms
financial institutions in the world. Uh is saying that about
a third of their of the participants who have Vanguard
administered four oh one k's, cashed out their entire balance
when they leave a job, rather than rolling it or
leaving it alone. So what this means is somebody says, well,
(17:29):
you know, I'm gonna leave ABC machines and go over
to eight to act me one two three, and I
got my old retirement plan there. Well, you know what
I don't. I don't want to keep it in retirement.
That's my money. I want to get it out. I'm
gonna go ahead. Yeah, the irs is gonna take a chunk,
but whatever, I'm gonna pull it out anyhow. So this
is a terrible, terrible cycle to be to get into
because and I say this all the time, especially to
(17:50):
young people, my client's kids, when when we get my
own kids, my kids, friends, and so forth, those first
dollars that you are putting into your four oh one K,
your IRA, those are the most valuable dollars you're we're
gonna have because they're gonna grow for forty or fifty
or even sixty years. Leave them alone. So this particularly
happens to hourly workers. Four and ten of them cash
out compared with just about two and ten of salaried workers,
(18:12):
even when the incomes are similar. So this does seem
to be the default position for a lot of people. Unfortunately.
Speaker 3 (18:18):
Yeah, Brian, this this, this takes me back to the
days when I used to be, you know, the actual
advisor to several fairly large four one K plans, and
I'd stand in front of the employees every year and
give kind of the annual update on asset allocation, tax law,
matching funds, all that, and invariably hands would go up,
and almost always they came from those hourly workers. And
(18:41):
you know, four and ten with that Vanguard study, four
and ten of hourly workers cash out their plans versus
just two intent of salary workers. But again those hands
would go up and Brian I would constantly fight against
this thought that's out there largely among hourly workers that
(19:02):
the company can take their money. You know that these
four to one K assets are an asset of the company,
and the company is somehow going to take their money
or rip them off if they leave.
Speaker 1 (19:13):
And I tried and tried and tried to remind them that.
Speaker 3 (19:16):
There's federal laws against that these assets are separate from
the balance sheet of the company. But sometimes people just
don't listen, or they're overextended in other parts of their
lives with credit card debt or car loans or what
have you, and it's just they see this as a
way to get my hands on a check, irrespective of
the penalties and taxes, and who knows what happens after that.
Speaker 4 (19:39):
Unfortunately, it's a great way to stay poor thinking like that,
and understand at least a little bit about the rules,
because what you're robbing yourself of is decades of compounded growth. Right,
So if you have just five thousand dollars in a
four to one K and you're young, then that money
could grow to over seventy thousand dollars by the time
you retire, assuming you're you know, on the younger side
of that thing. So why dis so many people walk away?
(20:00):
Well they just feel like I think it's like you said, Bob,
it's more about the well, you know, I need it
in my hand now so I can pay bills, and
I'm going to assume somehow that my evil employer is
gonna take it. That can't happen. Learn, learn what the
reality is, and learn what you're sacrificing. Extremely important.
Speaker 1 (20:14):
Here's the all Worth advice.
Speaker 3 (20:16):
Preserving and rolling over your savings rather than cashing them
out protects the financial foundation you're trying to build for
a retirement. You're listening to Simply Money presented by all
Worth Financial on fifty five KRC the talk station.
Speaker 4 (20:32):
They're learning about history fourteen ninety two and learning about
the news.
Speaker 1 (20:37):
It makes a little great again.
Speaker 2 (20:39):
Oh boy, locker, excuse you'll learn what's going on back
to school fifty five KRS the talk station.
Speaker 5 (20:48):
This is fifty five KRC and iHeartRadio station.
Speaker 3 (20:56):
You're listening to Simply Money presented by all Worth Financial
on Bob's Bond Seller along with Brian James, and we're
joined today by our career expert Julie Bauki Julie on
the Job, Julie, thank you for making time for us
this morning. And I know you've got an important topic
to cover with us today, and that's the topic of
tying our identity to our work, especially.
Speaker 1 (21:18):
When we think about pulling back or retiring.
Speaker 7 (21:22):
Yeah, you know, we give so much of our time
and energy and effort and resources to work that when
all of a sudden we decide one day it's time
to walk away, or somebody make that decision for us.
The more closely you have identified with your work in
your life, the harder that exit's going to be. Contrary
(21:43):
to this vision that I'm just going to step away
and I will be stepping into this amazing future. Unless
you build your what's next, the transition from being a
VP of something something to no longer having that title
is incredibly painful, and I think we really really underestimate
(22:05):
how hard that is for people.
Speaker 4 (22:07):
Sally, would you say, is it fair to say that
people put far more energy into building there? What was
meaning I'm going to think about my career and I
really want to drive things. Then they do in that
What's next thing and how do you get people off
of the notion that that's something that will take care
of itself.
Speaker 7 (22:23):
You know, when if you look back, so high performing,
high accomplishment people, people who accomplished a lot in their career,
they have most likely put an emphasis on that. When
you look at sort of the dinner plate of life,
let's call it. If work is your main course and
you've really crowded out any side dishes it when that
(22:44):
main course goes away, yes, you have accomplished a lot.
And so a lot of times people who are they've
accomplished a lot. They have big titles, big jobs, big
bank accounts. It has been at the expense of other
things on that plate.
Speaker 8 (22:59):
And so.
Speaker 7 (23:01):
Instead of expecting everything the shift to write itself after
you retire, you have to start thinking about now before
you retire. I mean maybe even when you're in your fifties,
where are you're putting your emphasis? Are you putting it
all on work? And then what are you short? You know,
what are you short changing? Family, friends, health, hobbies, community,
(23:23):
the kind of stuff that you might say matters, but
your action show otherwise. And so sometimes we get to
be high performing and wildly successful because that is where
we put our emphasis, so the loss when we walk
away from that. And this is why a lot of
people who are high performing, they have a really hard
time walking away because they won't be senator so and
(23:43):
so they won't be you know, vice president of this
or vice president of that, and because that's been how
they've identified for so long. It's really really a big fall,
especially when you go back home and your partner's not
that happy to see you, or your health has really
suffered and your doctor's on you. And so the only
way to get around this is to start thinking about
it well before you retire. How am I prioritizing my
(24:06):
time and what do I need to start building now
so that when I retire into five, seven years, whatever
it is, I have some other My non work bucket
is already starting to fill up. I can start to
imagine myself without that title. And it's still hard. It's
(24:27):
still hard to walk away from something that has been
that's so important to you for so long. But if
it's believed me, it is much easier to walk away
once you started filling that second bucket. Then to imagine
life without your title, your office, you know those sort
of things. And we all know that person who are
retired but still keeps coming back into the office and
(24:47):
walking around and talking to people. It's because they haven't
developed that next stage of life yet.
Speaker 3 (24:53):
Well, Julia, someone who's counseled, no doubt hundreds of people
through this transition. Walk us through some of the healthy
ways to kind of soft land into retirement or semi
retirement instead of just going cold turkey. What do you
counsel people to do in terms of practical steps to
make this transition ahead of time.
Speaker 7 (25:13):
It's one of my favorite things. So we all have
a calendar of some sort, and I've.
Speaker 4 (25:18):
Done this exercise myself.
Speaker 7 (25:19):
Walk ahead to some place on your calendar where you
have nothing on it yet, maybe it might even be
two years away, and look at that week, and say
to yourself, all right, I'm imagining this is my calendar
when I'm retired. It is empty. I now have full
control of my week, every minute of it to a
(25:40):
big extent. How am I going to fill it in?
How am I going to fill it in? How many
times a week do I want to play golf? Or
how many times a week is there a community thing
I want to involve it?
Speaker 2 (25:49):
In?
Speaker 7 (25:49):
Other words, start to imagine yourself in that space and
look at an empty calendar without work pulling on you,
and just imagine and how are you going to fill
that time? The delight of waking up, you know, at
seven instead of six and going online and reading the news,
and that wears off pretty quickly, even though it might
(26:09):
sound like nirvana right now. So you have to you
have to put yourself into the future and say, how
will when I have a weekly stretching in front of me,
how will I spend my time? Is it going to
be family, friends, community? Am I going to start getting
more serious without my health? And then fill in the
calendar is if you had full control of it? What
have you ignored in the last twenty thirty years of
(26:32):
working that you're really interested in? Are you going to
ramp up in a hobby. Are you going to become
better at something or are you going to learn something?
Are you going to get involved in something? What are
you going to do to make that next phase of
life as powerful and meaningful as your previous ones? For
because we've offered the stories about, you know, the last
(26:53):
several decades, people who retire and then die soon after
it's because they went from having great purpose to completely
loss of purpose. And that sounds really really seductive when
you're in the middle of a crappy day, but it's not.
It's not so great when you're in the middle of it.
Speaker 4 (27:08):
Julie, I want to hear some war stories. So so
Bob and I as financial advisors, we of course have
our favorite, our favorite times where we help somebody with
a financial plan. Maybe they were scared to death and
we helped them put the puzzle pieces together and they
walked out, you know, pretty happy. Can you give us
an example, of course, without naming any names, of somebody
that was just terrified until you put a plan together
and how does that? That does that work? What was
what's your most favorite story?
Speaker 7 (27:30):
Yeah, so it was a woman who had a great
job in marketing. I'm just a great job and she.
Speaker 5 (27:38):
Liked it.
Speaker 7 (27:39):
You know, she's kind of five out of ten. But
she had started a side business that that she was
really passionate about because she was so afraid to step
away from what she saw as a dependable, logical, common
sense thing, because she thought people would say, why are
you doing that? You're sixty two years old, you know,
why are you you know, why would you walk away.
(28:01):
You've got a great job, they love you. Why would
you walk away and try something new at fifty two
years old. They looked at her life, she was crazy,
and we were able to help her figure out what
was most important to her. It takes almost a polaroid
of snapshot. What's the most important to you now? And
why are you listening to anybody else except what you want?
And what's most important to you? And once she was
(28:23):
able to kind of shut out the noise of other
people giving her the shoulds and are you crazy, she
was then able to get really clear about what was
most important to her for the next five to seven
years or as long as she wanted to work, and
it was clearly in building this side business. It already
had signs of being really successful. She took the leap
(28:43):
because she'd said, Okay, I've got it's now or never.
And of course, you know we're all looking at her
like you're not. You've got to do this. And just
checked in with her recently, and she is incredibly happy.
She looks ten years younger, and she's just as successful
in the side hustle as she was as she as
in her original job. And that's the same with people
who have a passion for animals or community. Once they're
(29:06):
able to put more time and resources into that, you
can see them absolutely come alive. We've had clients move
from for profit from a high level position and a
for profit to a high level position a nonprofit where
they are instead of focusing on how many widgets they sell,
they're focusing on how many lives they impact, and to them,
(29:27):
that's meaningful. So you have to figure out what your
priorities and values are for the next phase of your life.
Once you can ank that, making that jump is a
lot easier.
Speaker 3 (29:39):
All right, We got to leave it there for today, Julie,
but thank you as always for all the great advice
you provide us and our listeners. You're listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station.
Speaker 2 (29:52):
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Have you been Torc?
Speaker 3 (30:31):
You're listening to Simple Money, presented by all Worth Financial
umbop sponsller along with Brian James. Do you have a
financial question you'd like for us to answer? There is
a red button you can click while you're listening to
the show right on the iHeart app. Simply record your
question and it will come straight to us. All right,
speaking of questions coming to us, Brian, we're gonna kick
(30:52):
things off with Karen and Mason, who says, I've.
Speaker 1 (30:56):
Already done Roth conversions.
Speaker 3 (30:58):
What else should I be thinking about to pull money
out of retirement accounts tax efficiently over the next decade.
Speaker 4 (31:05):
Yeah, that's great, Karen, You're you're kind of ahead of
the game there. So when Roth conversion, of course, means
you're taking your pre tax four oh one K dollars,
which is mostly what we have in our four oh
one ks and four or three b's because that's all
that existed thirty years ago. It's all you could do,
and you've decided to pay it, pay taxes proactively. I'm
guessing you probably wrote some decent sized checks to the irs,
and now that money from that day forward will grow
(31:25):
tax free. So very much a sacrifice up front in
exchange for a significant benefit on the back end. But
make no doubt about that sacrifice, as I'm sure Karen
is well aware. So she's asking, of course, what else
can she do? Well, that's really the big thing. What
you're doing, I would say, pay attention to the impact
it's having, so you know, you might even look at
doing backdoor ROTH contributions if you're still putting money out
(31:48):
in I'm not sure if you're retired or not, but
if you're still putting money away then and you can't
you think you can't do ROTH contributions, you may actually
be able to. But beyond that, when you hit another
thing to bear in mind, as you are charitably, when
you hit a point of when you have to do
your required minimum distributions, which could be age seventy three
to seventy five depending on when you were born, then
you might want to look at something called a qualified
(32:10):
charitable distribution or a QCD, which would mean you're sending
your RMD that you have no choice about directly to
a charity and therefore you don't pay any taxes moving
parts to that. But those are things to think about.
So let's flip over here to Andrew and Anderson, and
he asks, when drawing down my retirement accounts, should I
prioritize my taxable accounts first to keep that Wroth money
compounding or is that too overly simplified Bob.
Speaker 3 (32:33):
Well, Andrew, I'd say this, you know, in a perfect world, yes,
you want that Wroth money compounding as long as it
can because obviously it's compounding tax free, and you could
pull the money out tax free.
Speaker 1 (32:44):
So you're thinking about this the right way.
Speaker 3 (32:47):
The details come down to what what are we looking
at here with.
Speaker 1 (32:51):
These taxable accounts? How much tax exposure do you have?
Speaker 3 (32:55):
And so the key thing to focus on is your
marginal tax bracket when you look at where where all
your income is coming from from all sources meaning social Security.
Maybe if you have a pension taxable accounts, IRA withdraws
raw IRA accounts require minimum distributions. There's a lot to
look at here. So my answer would be sit down
(33:17):
and help with maybe a good advisor, a fiduciary advisor,
craft a tax efficient income strategy because you might end
up wanting to pull some money from different sources, and
along the way, if you've got some big embedded gains
in those taxable accounts, there's ways to work out of
that on a tax efficient basis and make everything work,
(33:39):
you know, much better and much more efficient efficiently over
the long haul. Great question, Andrew, All right, let's go
to Ron in Fort Thomas. Brian, this one's for you.
Is direct indexing actually worth it for someone with a
five million dollar portfolio? Or is that all just marketing hype? Brian,
Ron is tired of your mark marketing hype about direct indexing.
Speaker 1 (34:02):
Will you educate him here?
Speaker 3 (34:04):
It's not just hype that this stuff might actually work
in some cases.
Speaker 4 (34:08):
Yeah, so let's sor sorry, we've been a little overbearing
on that. Apparently they're Ron, but these these are important tools, right,
So the right tool for the right job. And frankly,
assuming this five million dollars maybe and maybe this is
the rough. If this five million dollars is inside of
an IRA or four to one k, which does happen,
then no, this doesn't help you at all. Direct indexing
is it is kind of irrelevant to that. It has
(34:30):
no impact on the tax outcome in that situation. But
if you've got five million taxable meaning not IRA, not
four oh one k, just outside in a in a
regular account that spits out of ten ninety nine, there
is even if that's your only asset, there's a good
chance that you have a six digit income anyhow, just
off the dividend and interest activity alone. So direct indexing
allows you to build a portfolio with the similar to
(34:54):
a pile of mutual funds that would have the built
in diversification that we want, but instead of the individual
mutual funds, you're looking at literally individual securities that make
up that whole portfolio. So yes, it would be a
whole lot of positions in your portfolio. The benefit, though,
is each and every one of those, you know, let's
let's say you're mimicking the S and P five hundred.
Each and every one of those five hundred stocks has
(35:14):
its own tax situation, meaning as one of them has
a bad quarter, has bad earnings, or it gets you know,
some lawsuits flapped against them or something like that, which
is going to happen to everybody every single year, it's
always possible then that stock is going to take a hit.
You can pinpoint that stock in your portfolio, sell it,
take the loss, and then stay out of it to
avoid a wash sale. Stay out for thirty days, and
(35:35):
then buy back in and you get to deduct that loss.
You know, over five hundred companies over a year, stuff
is going to happen. You know, market goes up and down,
companies have good quarters and bad quarters. That creates a
lot of tax loss. Harvesting activity that can offset a
lot of that dividend income and interest income that's going
to happen anyway. So you, sir, are the definition of
somebody who should be considering the direct indexing if that
(35:57):
five million is exposed to taxes.
Speaker 1 (35:59):
All right?
Speaker 4 (36:00):
One more from Martin and Lebanon. So should I delay
social Security even if I don't need the income just
to maximize survivor benefits for my spouse?
Speaker 3 (36:08):
Well, Martin, this social security topic, as you might imagine,
is a loaded one. There's a lot of moving parts here,
and there's different factors that go into decisions on how
to do your claiming strategy.
Speaker 1 (36:19):
The easiest thing is to run that spreadsheet saying.
Speaker 3 (36:22):
Hey, if I delay, I delay, I delay, you get
the eight percent you know bump every year you don't
take it, and it all depends.
Speaker 1 (36:30):
On how long you expect you're going to live.
Speaker 3 (36:32):
You know, there's a break even point usually in the
load of mid eighties if you just maximize. However, different
people want to make different decisions for different reasons. Some
people think the Social Security you know, benefits are going to.
Speaker 1 (36:44):
Get cut twenty four percent.
Speaker 7 (36:46):
Uh.
Speaker 3 (36:46):
You might have things going on with your investment portfolio
or other sources of income that dictate it might make
sense to take social Security earlier. So you know, it's
important to sit down again, like we talk about all
the time craft and income strategy, factor in all the
possible sources, factor in the tax ramifications of where you
take your income and go from there. You're listening to
(37:09):
Simply Money presented by all Worth Financial on fifty.
Speaker 4 (37:11):
Five KRC the talk station Mark Levin.
Speaker 8 (37:16):
Let me tell you the Internet is breeding evil, breeding evil.
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And TikTok is the main culprit.
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And I don't know what's happening with TikTok, but that
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about free speech and everything else. It's a private company.
The company needs to clean it up because this is
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people put on this stuff.
Speaker 2 (37:38):
Mark Levin tonight at ten oh six on fifty five
krs the talk station.
Speaker 7 (37:43):
It's I am so worried that next month I have
to choose between groceries for my kids or gas for
my car.
Speaker 2 (37:49):
Talk about it here fifty five krs the talk station.
Speaker 3 (37:57):
You're listening to Simply Money, presented by all Worth Financial
Bob spond Seller along with Brian James. And it's time
for Brian's bottom line. Brian's going to talk about how
to care for loved ones, folks that we really love
dearly and need to care for when we're entering our
own retirement phase of life.
Speaker 4 (38:16):
Yeah, and so I reason it's coming up, Bob. And
I'm sure we all share our war stories around the
water cooler. I'm sure you've got clients in similar situations.
But a lot of people know about the you know,
situations where maybe the Sandwich generation, where I have to
care about my own parents who maybe are starting to
need more and more help as well as helping my
kids get going.
Speaker 8 (38:33):
Uh.
Speaker 4 (38:33):
And so that's a fairly common thing. But there are
other situations out there where you know, we could be
a sibling. So I've got I've got a case where
one sibling has needed extrac care for for decades now,
and that has been provided by a sibling who's just
in a kind of a stronger position to provide it.
But now everybody's getting to that stage of needing to
retire and start starting to think about their own needs.
(38:54):
So what do we do in cases like this? So
just some of the things that to be paying attention to.
So I've see, make sure you know what your long
term incomanis are to begin with. Right, every financial decision
starts with where am I now? And now I can
understand so that I can clearly understand what is the
impact of this outside very specific problem that I have
to deal with in my own situation. If that loved
one does receive government benefits like Social Security, Medicaid, you're
(39:16):
going to want to avoid giving them assets directly that's
not going to That can cause problems, It can cause
those those benefits to be reduced. Special Needs Trust can
provide those supplemental funds without disqualifying for benefits. There are
things called able accounts ADL e. If they qualify, that
can be tax advantage. Savings of it could be up
to eighteen thousand dollars a year and twenty twenty five
without screwing up those benefits as well. You'll also want
(39:38):
to you want to have to look at how does
medicare and Medicaid coordinate with these things, because there are
a lot of moving parts there. Sometimes Medicaid can cover
some long term care services that Medicare won't. Long term
care planning what happens if you become this is really
the rub. This is a situation I'm seeing is is
my clients who are in a good position are realizing
that they themselves at some point are going to need
(39:59):
help and they certainly can't be a reliable and safe
resolution for their for their sibling who needs the extra assistance.
So what they're looking into is how can we arrange
using his assets? How can how can we arrange a
better care situation for him? So they're looking at different
nursing homes and again it's all started with what's the
budget for this, what's the income and what can the
assets that he has support? But anyway, so lots to
(40:22):
think about there. Make sure you're being clear and upfront
with everybody you know, especially that person to whom you're
providing care, because they may not understand what the situation
actually is. So this is a conversation to start sooner
rather than later.
Speaker 1 (40:34):
Good stuff, Brian.
Speaker 3 (40:35):
And the only only other thing I'll add is there
are attorneys out there that specialize in this type of planning,
and I know you and I have both referred folks
to good attorneys like that who are really good at
helping speck out these situations to maximize benefits for the family.
Speaker 1 (40:49):
Thanks for listening.
Speaker 3 (40:50):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRCE the talk station.
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